Barclays 2009 Annual Report Download - page 173

www.barclays.com/annualreport09 Barclays PLC Annual Report 2009 171
In addition, there was a significant increase in the use of deferral, equity
and long-term awards, particularly to senior executives. Around 5,000
employees will have a proportion of their remuneration delivered as long-
term awards. All discretionary remuneration for members of the Group
Executive Committee and all members of Barclays Capital Executive
Committee will be delivered over a three-year period and subject to
clawback.
Long-term awards take the form of equity or cash, paid over three years.
73% of the long-term awards from the 2009 pay review are in the form of
equity. Two new plans have been introduced for the purpose of making
long-term awards below the executive Director level, the Share Value Plan
and Cash Value Plan. These are described in further detail in the following
report.
We are compliant with the FSA Remuneration Code and the Financial
Stability Board Implementation Standards endorsed by the G20 and have
applied these to the decisions of the 2009 pay review. The overall quantum
of remuneration is also consistent with the FSA’s minimum capital
requirements. A direct and intended consequence of our 2009 pay decisions
has been the further strengthening of our Core Tier 1 capital ratio.
The compensation pool has been managed in such a way that the UK
Bank Payroll Tax cost broadly equates to a reduction in the size of the pool,
with the reduction being borne by senior executives. The cost to the Group
of the UK Bank Payroll Tax in respect of 2009 cash compensation is £190m,
and £35m is being provided in respect of certain prior year awards which
may fall within the proposed legislation.
The following approach has been taken on executive Directors’
remuneration:
– appropriate consideration was given to non-financial measures as well as
risk considerations in the assessment of executive Directors’ performance
– zero annual performance bonus for the Chief Executive and the President.
This is the second successive year that they have advised the Board that
they wish to decline any annual bonus awards
– no long-term award for the Chief Executive. This is the second successive
year that he has advised the Board that he wishes to decline any long-term
award
– current executive Directors who have long-term performance shares due
to vest and be released in 2010 intend to agree to voluntary clawback
arrangements operating over a further two years.
These outcomes for executive Directors were carefully considered and seek
to ensure an appropriate share of value between employees and
shareholders, with full consideration also being given to the requirements of
other stakeholders such as regulators and governments. They follow on
from the unequivocal outcomes in respect of 2008: no salary increases or
annual performance bonuses, long-term awards 64% lower than 2007 with
no awards for the Chief Executive and President, and the vesting of long-
term awards to executive Directors due to be released in 2009 being
deferred for a further two years subject to additional financial performance
over that period.
Activities in 2009
The Committee exercised effective governance in 2009, meeting 14 times to
review remuneration practices, frameworks, regulatory developments and
market data and advice from external consultants.
In addition to the wider review of remuneration arrangements, the key
activities were as follows:
– approval of annual remuneration packages including incentive awards for
executive Directors and other senior executives as part of the 2009 pay
review
– approval of senior executive remuneration packages on appointment,
promotion and termination
– approval of aggregate incentive funding for each of the major businesses
– assessment of performance against relative TSR, cumulative Economic
Profit and other financial performance targets to determine the vesting
level under performance share and other long-term awards
– selection of performance metrics and calibration of targets for long-term
awards
– preparation, review and approval of the Remuneration Report.
Report
The following report of the Committee provides further explanation of the
current remuneration governance and arrangements for executive Directors
and is divided into the following sections:
– Committee remit, members and advisers
– Remuneration policy, decisions and governance
– Executive Directors’ remuneration
– Non-executive Directors’ remuneration
– Former Directors’ remuneration
– Share plan descriptions.
As required by Schedule 8 of the Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations 2008, the Group’s auditors,
PricewaterhouseCoopers LLP, have audited the information contained in
Tables 1b, 3, 5, 10, 11, 14, 16, 17, 18 and 19 of the Committee’s report.
The Committee unanimously recommends that you vote at the 2010
AGM to approve the Remuneration Report as all Directors will be doing with
their own Barclays PLC shares.
On behalf of the Board
Sir Richard Broadbent
Chairman, Board HR and Remuneration Committee
9th March 2010